SUPER COMMITTEE FINDS DEBT DEAL ELUSIVE
Gold prices are relatively unchanged today despite a weaker dollar and continuing fears over the Euro-zone debt crisis. . Rising borrowing costs for Spain, Italy, and France has prompted a broad sell-off in global markets and forced some investors to sell gold to cover losses. "When you have a sharp market selloff you get fund redemptions, you get individuals closing accounts or taking money out and you get margin calls," explains Adrian Day, president of Adrian Day Asset Management, "and you get forced selling ... so they sell gold." Day went on to tell The Street that the fundamentals for gold continue to support higher prices long-term. "People have been buying gold because they don't trust paper money ... and nothing has changed in that respect,” he said. (The Street, 11/18/11)
U.S. stocks are mixed following two days of losses as investors digest the latest news on the U.S. super committee and Europe’s ongoing debt crisis. "Investors are focused on the potential headwinds from two exogenous wildcards," said Phil Orlando, chief equity market strategist at Federated Investors to CNN Money. The super committee has less than a week to present a plan to cut $1.2 trillion from the U.S. debt, but an agreement remains out of reach according to the latest reports. "Everyone is scared to death that the super committee is dysfunctional and isn't going to get anything done," said Orlando. (CNN Money, 11/18/11)
CNBC reports that Standard & Poor’s plans to update its credit ratings for the world’s 30 biggest banks in the next few weeks, and those updates are likely to include further downgrades. According to CNBC, “Among the institutions that could be downgraded are Bank of America, Citigroup, and Morgan Stanley said Baylor Lancaster, an analyst at CreditSights.” Some European banks are also likely to be affected. “On Nov. 9, S&P downgraded its scores for the health of the banking industries in a number of countries, including Denmark, Sweden, Finland and the Netherlands.” (CNBC, 11/18/11)
†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.
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- S&P Capital IQ - Gold: $1,900 (in 2012) "Leo Larkin, metals and mining analyst at S&P Capital IQ, thinks that $1,900 gold might not be that much of a stretch [in 2012]. 'Gold has been ..."
- Citigroup - Gold: $2,300 - $2,400 (by end of 2012) "While we remain cautious on Gold in the near term...we continue to believe that the bull market remains intact...we believe that 2012 may be..."
- Leeb Capital Management - Gold: $2,500 - $3,000 (in 2012) "I'll give you my target for gold at the end of 2012, it's going to be trading somewhere between $2,500 and $3,000. This..."
- Global Hunter Securities - Gold: $1,800 (in 2012) "'What I am looking for is a gold price of $1,800 an ounce in 2012,' says Jeffrey Wright, senior research analyst at Global Hunter..."
- US Global Investors - Gold: $3,600 (by 2017) "'People get so caught up with the next three minutes for gold and they should really be focused on the next three years,' says Frank Holmes, ..."
- Goldman Sachs - Gold: over $1,900 (in 2012) "Wall Street investment bank Goldman Sachs predicts that gold's bull run will continue into 2012 with a low interest rate environment and..."
- CNBC - Gold: $2,400 (no period given) "Gold will top $2,400 an ounce. The long-term bull market in gold marches on. Gold won't make a straight shot to a new inflation-adjusted high. As long..."
- Nomura - Gold: $2,000 (by end of 2012) "Nomura has raised its forecast for gold prices to $2,000 an ounce by the end of 2012, from $1,800 earlier. The brokerage said the low-interest rate..."
- Morgan Stanley - Gold: $2,200 (in first half of 2012) "Gold will lead a rally in commodities in 2012 as Europe's sovereign-debt crisis continues to roil financial markets, spurring demand for ..."
- UBS - Gold: $2,050 average in 2012 "[Gold] remains one of the top commodity picks for 2012 as 'most of the factors that pushed gold higher in 2011 are not going away,' according to UBS..."
- Bank of America Merrill Lynch - Gold: $2,150 - $2,200 (average in 2012) "From a technical perspective we believe that the bull trend for gold remains intact… with gold having not yet met any of..."
- TheStreet.com - Gold: $2,500 (by May 2013) "I want to own gold here. I think gold is going to $2,500 eighteen months from now... Gold has been up for ten straight years and this going to be the..."
